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Blog posts tagged Bank

Perhaps controversially, I believe that too much emphasis and, indeed, money is spent on encouraging people to start their own business. In my opinion, resources should be restructured to offer more help to people once they have actually taken the plunge.

I believe people should be shown that business is a genuine career option, and I am a strong advocate of Young Enterprise. But I’ve seen too much money wasted on national campaigns encouraging Joe Bloggs to start a business while someone who has a great small business cannot get to the next stage because of unnecessary barriers.

A prime example of a product which should help but which doesn’t is the Government’s Small Firms Loan Guarantee (SFLG). The idea behind this is that the Government covers some of the risk of the loan in order to allow banks to lend more easily to small businesses.

This was re-launched last year as the Enterprise Finance Guarantee Scheme and the Labour Party’s manifesto tells us it has helped 9,000 businesses. Writing as someone who has first-hand experience of the SFLG, I can tell you that if I was to start the process over again, I certainly wouldn’t bother. In the end we gave over so many of our own guarantees that the entire point was lost; despite whatever their PR says, the banks are simply not ready and willing to lend on this scheme.

In a nation of more than 60 million, 9,000 people on this scheme is not a claim to fame but an admission of failure. The figure should be tenfold. The Government needs to seriously and quickly address this issue and they should not be putting forward a scheme which the banks may or may not promote. They should be telling the banks that if a business comes in and meets a set of criteria, then they must allow them finance under a scheme where the risk of the loan is partially covered by the Government itself.